To Save Georgia’s Kids, Raise Tobacco User Fees

To Save Georgia’s Kids, Raise Tobacco User Fees

As governors and legislators across the nation tighten their purse strings, states are facing tough budgetary trade-offs. Governor Sonny Perdue’s move to increase Georgia's tobacco user fees is 1 budget decision that makes good sense.

Georgia is currently recognized for a most unfortunate distinction. While the nationwide user fees for cigarettes average about 62¢ per pack, Georgia's user fee amounts to a fifth of that—only 12¢ per pack—a level set in the days of the Nixon administration. Georgia’s tobacco user fee is lower than all but 4 states. This puts cigarettes well within the reach of Georgia teenagers and denies the state an important revenue opportunity.

Tobacco price increases reduce smoking by teenagers. As early as 1981, a study published in the Journal of Law and Economics showed that a 10% increase in the real price of cigarettes leads to a 12% decrease in consumption among 12- to 17-year olds. Higher tobacco user fees and the resulting hike in cigarette costs are bad news for the tobacco industry: Big Tobacco’s enormous profits depend on access to children as both current consumers and future customers.

A 10% increase in user fees alone would keep 6% of young Georgians from taking up smoking. Preventing youth smoking not only improves kids’ health now; it also means they are far less likely to smoke later in their lives. For most smokers, lifelong addiction to cigarettes begins in the teen years. Deterring teens from smoking can prevent lifelong addictions from forming. As more than 10 years of research at The National Center on Addiction and Substance Abuse (CASA*) at Columbia University have taught us, a child who gets through age 21 without smoking, using illegal drugs or abusing alcohol is virtually certain never to do so.

Revenue generated from tobacco user fees could be used to create effective public education programs to reduce teen smoking, including hard-hitting television spots. One successful example is Florida’s multi-year effort to address substance abuse among children and adults. This targeted effort has brought a 38% reduction in teen smoking over the past two years--from 18.4% in 2000 to 11.4% in 2002. In the past year, as a result of this campaign, marijuana use has dropped 13% among Florida middle-schoolers and 5% among the state’s high-schoolers. Compared to 1995, marijuana use in Florida is down 15% for 12th graders, 33% for 10th graders, and 27% for 8th graders. Most kids who smoke marijuana are believed to have first learned how to smoke and inhale on nicotine cigarettes. So, reducing the number of teens who smoke nicotine cigarettes will help reduce the number of teens who smoke marijuana. California has also launched a program, combining a $.75 tax increase per pack of cigarettes, with a public health campaign to achieve a 14% decrease in lung cancer over the past 10 years.

A recent CASA* survey found that most teens who use cigarettes, alcohol and marijuana do so by the time they are 15, and that the average age of first use for those kids is only 12¼ for cigarettes. Governor Sonny Perdue’s move to increase tobacco user fees will go a long way toward keeping cigarettes out of the hands of Georgia’s children. The user fee will generate much-needed revenue to help save the state of Georgia from painful budget cuts and provide for the health of thousands of underserved Georgians.

Americans everywhere have felt the burden of skyrocketing health care costs over the last few years. The Medicaid program is no exception. The increasing cost of providing healthcare for individuals in poor and in rural areas has meant multimillion dollar increases in Medicaid budgets across the country. In Georgia alone, the state government must put an additional $259 million into Medicaid to cover costs for this year and another $380 million to fund the program in 2004.

Raising Georgia's low tobacco user fees will help the state government find the revenue it needs to meet its commitments to its citizens. Other states have shown the way: in the last 14 months, 20 states have taken the approach of increasing tobacco user fees to help cover growing health care costs. Measures to raise tobacco user fees have received bipartisan support, with Republican governors signing user fee bills into law in states from Massachusetts to Arkansas.

Higher tobacco user fees are good for Georgia’s economy and will save lives. The resulting increase in cigarette costs would keep children away from a lifetime of addiction, while making hundreds of millions of dollars available to cover health care costs for Georgia’s underserved citizens. That’s a triple win for Georgia—it means help for the state’s budget, help for the children, and help in paying for citizens’ basic health.

Joseph A. Califano, Jr. is Chairman and President of The National Center on Addiction and Substance Abuse (CASA) at Columbia University. He was U.S. Secretary of Health, Education and Welfare under President Carter.

February 19, 2003

*The National Center on Addiction and Substance Abuse at Columbia University is neither affiliated with, nor sponsored by, the National Court Appointed Special Advocate Association (also known as "CASA") or any of its member organizations with the name of "CASA."